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bitcoin bull flag
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Could A Bitcoin Bull Flag Leave Bears Blindsided?

Tony Spilotro by Tony Spilotro
8 months ago
in BTC
Reading Time: 3 mins read
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Bitcoin price is at a crossroads, either ready to fall into the troughs of a bear market, or blast off and show the world the bull run has yet to officially end. But which is it? No one truly knows, but a technical pattern and the psychology behind it could reveal the potential outcome ahead of time.

Could a potential bull flag forming on daily timeframes confirm, and lead to what is ultimately the checkered flag of the current market cycle? Let’s examine the bullish chart pattern.

What Is A Bull Flag? Bitcoin Price Pattern Targets New All-Time Highs

Technical analysis is the study of chart patterns, sequences, candlesticks, indicators, oscillators and more. The study is used to improve profitability by using statistics to increase probabilities of results. This can vary from finding price targets to sell assets, or finding support and resistance.

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A bull flag is a bullish chart pattern and there is potentially one forming on the daily BTCUSD price chart. It is hard to say that Bitcoin price action is bullish right now, considering it was trading at $65,000 only a few months ago, but the pattern fits the shape.

Related Reading | Build Base Or Bust? Bitcoin Touches Down On Parabolic Support

The pattern is characterized by a long sharp move that creates a flag “pole” followed by consolidation within a channel which represents the flag itself. Bull flags are often found slanting slighting downward, as the pattern gives bears the false sense they are winning, which results in an even sharper move higher when these traders realized they were wrong.

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Will the bull flag pattern confirm? | Source: CME BTC1! on TradingView.com

The Psychology Behind The Chart Pattern Breakout

Bears sure seem to be in charge of Bitcoin price action as of late, but bulls could be preparing to blindside bears with a breakout of the bull flag pattern and short squeeze.

The psychology of the bull flag is the perfect setup: A pole is caused by bullish buying and shorts covering. At the local high, price repeatedly is rejected making lower highs and lower lows. Bears celebrate and but become complacent, even adding to losing short positions.

Related Reading | Why Bitcoin Bears Might Not Get To Buy New Lows

When bulls gain the upper hand, the resulting breakout is often even stronger than the pole itself, because more shorts have piled on who cover, combined with any incorrect positions that have accumulated during the pattern itself.

Bitcoin price is currently at $43,000, and if the pattern is valid, based on the measure rule the target would be closer to $82,000. Serious momentum from buyers and shorts covering both would be necessary to restart such a powerful trend.

Doubling in value from one price pattern alone would be shocking for bears and bulls alike, but it would be accurate based on a variety of factors. For example, the bull flag is touching down on what could be a parabolic base three, or an Elliott Wave impulse wave five just beginning. It also could be one big trap for Bitcoin bulls who could get caught in further downside.

Follow @TonySpilotroBTC on Twitter or via the TonyTradesBTC Telegram. Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

Tags: bitcoinbtcbtcusdbtcusdt.xbt
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter at @tonyspilotroBTC and feel free to drop me a line if you would like to work together.

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